Can you keep your vehicle without reaffirming its loan? Can you make the payments without reaffirming? What if you can't afford the payments?
If you want to keep your vehicle and still pay on its loan, file a Chapter 7 case to write off other debts and reaffirm the vehicle loan.
When is it better to reaffirm your secured debt--such as a vehicle loan--in a Chapter 7 case or instead cram it down under Chapter 13?
A creditor's rights over you in either Chapter 7 or 13 vastly increase if it has a security interest. Now's the time to find out for sure.
Here's an example of the reaffirmation of a vehicle loan in a Chapter 7 case vs. "cramdown" of the debt in a Chapter 13 case.
Here are examples of the reaffirmation of a secured debt (like a vehicle loan) in a Chapter 7 case vs. addressing it in a Chapter 13 case.
When is it better to reaffirm a secured debt (such as a vehicle loan) in a Chapter 7 case vs. handling it instead in a Chapter 13 case?
Unlike most legal contracts, you can change your mind and undo a reaffirmation agreement during a short period of time after signing it.
You don't need to go to a reaffirmation hearing, unless you don't have a lawyer, or he or she does not sign the reaffirmation agreement.
You usually have to get current on a secured debt before you can reaffirm it. But the terms of a reaffirmation agreement may be negotiable.
Reaffirming a debt, including a vehicle loan, can be a very sensible choice. But be fully aware of the risks and possible other options.
You can usually keep collateral you need to keep by entering into a "reaffirmation agreement" with the creditor during your Chapter 7 case.
Often all your debts are discharged--legally written off--in Chapter 7. But some you might want to pay, or might not be able to discharge.
If your vehicle is worth less than its debt, and you can get the money representing that value, you can "redeem" the vehicle free and clear.
If your vehicle is worth less than you owe on it, under Chapter 7 you can keep it by "redeeming" it--paying its present value in full.